IP networks are not involved.
East Germany is probably the most obvious example in recent times - and the fear mostly came from knowing someone could inform on you. If you thought a person was going to inform on you, one would avoid them naturally.
So, if you think a computer will inform on you, you would naturally avoid it.
It seems to me that the chinese state is in a bind similar to that faced by Deng xiaoping - this thing the West does (Capitalism or Internet) is enabling them to charge so economically ahead it is an existential threat not to follow. But if we do follow the party risks losing control.
Deng did take the risk and the loss of control seemed to be offset - however this time the rifts in the party are deeper, the gulf between rich and poor wider.
I would not like to be making those choices.